November 08, 2024 04:24 GMT
PHP: USD/PHP Away From 59.00 Test, But Peso Still Underperforms Past Week
PHP
Spot USD/PHP has backed away from a test of 59.00. Broader USD softness has sent the pair back to 58.40/45 in latest dealings. Session lows rest at 58.38. Post US election highs in the pair printed at 58.805, which was just short of earlier YTD highs of 58.93.
- Still, for the past week PHP is the second worst EM Asia FX performer, off a little over 0.50%, overtaken by KRW losses in recent dealings.
- The earlier Q3 GDP miss hasn't helped onshore equity sentiment, with the PCOMP back sub 7000 after touching 7600 in early October. Offshore investors have dumped $100mn of local stocks up to Thursday, which is chunky outflows for a market like the Philippines.
- Comments from top economic planner Arsenio Balisacan yesterday also suggested there may be some benefits from a weaker FX post, after the recent spike higher in USD/PHP. He didn't indicate concern with current FX levels and that its boosts the value of remittances. Sharp swings are still not desired though.
- This may suggest a near term hands off FX approach, which is something BSP Governor Remolona has also suggested this year. With inflation pressures well off cycle highs, it also shouldn't impede further BSP easing.
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